Monday, 24 August 2009

BW directly managed moorings contribute in excess of £4M profit per year to BW general coffers (but you can’t afford to replace our refuse bins?)

(Picture - Bins at Kensal Green Moorings – one bin is missing completely. Of the remaining four only one is in close to adequate condition, the hinges are broken on two and the lid is completely un-attached on the third – these bins are ten years old but BW does not apparently have the money to replace them).

In response to his comments at the Residential Boat Owner Association AGM I recently wrote to Robin Evans, challenging his assertion that one purpose of the BW Moorings Tenders process is to avoid BW “subsidising” the cost of moorings.

Robin’s response is very revealing and indicates that on average two thirds of the mooring fees that BW moorings customers are paying is going into the general BW funds.

My e-mail to Robin said:

You have on many past occasions used the argument that BW cannot “subsidise” its directly managed moorings as attempted justification for moorings tenders, most recently at the RBOA AGM last Saturday.

This raises some obvious questions which I would be grateful for your thoughts on.

"Subsidise” has clear meaning: “pay part of the cost of producing (something) to reduce its price”. Compact Oxford English Dictionary ( )

1. Can you cite any recent examples where you have evidence that BW have been providing moorings at less than cost?
2. Also, when guide prices and reserves are set for moorings tenders, what if any checks or policy framework applies to ensure that the reserve price is set at or in excess of the cost of providing that berth?

(Avoiding this situation was I recall one of the reasons cited when the market rates based pricing policy was adopted many years ago, long before Moorings Tenders hove into view. Are you saying BW had not been following its own policy on setting moorings prices at commercial levels during that time and needed to add the tendering process to enforce that?)

3. What is your best estimate of the surplus in terms of income versus expenditure that BW accounts for from its directly managed moorings business?

Can we at least agree that moorings tenders has nothing whatsoever to do with ensuring BW covers its costs?

His reply on these points was as follows:

I am sure we will disagree on the appropriate ‘market’ definition for BW but as far as I am concerned, if we don’t receive market value, there is a subsidy involved.
The reserve prices at tender are based on market pricing, not cost of provision.
We made it very clear during the tender trial consultation that we are proposing a tender/auction system because there was evident dissatisfaction with our previous assessments of market price. We believe that the tender/auction system gives clear open and unambiguous information on market pricing.
My best estimate for the contribution from moorings in 2008/9 was:
Gross Income £5.9m
Costs £1.6m
Contribution £4.3m
I very much doubt the above costs line captures all maintenance and costs, but it is a good ‘best estimate’.
In other word according to Robin’s “best estimate”, in excess of 70% of BW moorings customers’ fees go back into the BW general coffers.
To add insult to injury at my mooring (where there are 10 berths which contribute in excess of £48 000 a year to BW’s coffers), the local staff apparently do not have a sufficient budget to replace four refuse bins, three of which are literally falling apart and which might at worst cost BW £3-400 to replace.
I have been asking for these bins to be replaced for over a year and the latest response from BW was to ask me to ask the Council to replace the bins, despite the fact local BW office have been told previously by both myself and the Council that the Council here does not use any bins for domestic refuse collection.
BW designed and specified the refuse facilities here without reference to the Council in the first place but now apparently think that the Council should bear the cost of managing their mistake. Our refuse collection here has to be subject to a special arrangement which frequently breaks down because not surprisingly it is confusing to Council officers and contractors that our arrangements are different to those that apply to almost every other resident in the borough, thanks to BW.
BW can apparently squander millions on their ill-fated property ventures, and make huge profits on their moorings activities but cannot apparently find a few hundred pounds to keep a basic service to individual moorings customers up to scratch?
Oh and the increase in mooring fees here this year was 12%!
You wouldn’t believe that I have twice taken successful cases to the Ombudsman about poor repairs and maintenance on this site? Well I have and still we can’t it seems get the basics sorted out promptly.

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